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William Perez

Tax Issues from the First Presidential Debate

By October 9, 2012

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The first of three Presidential Debates was held on October 3, 2012. Incumbent President Barack Obama debated the former Governor of Massachusetts Mitt Romney. Transcripts of the debate can be read at the Washington Post and at CNN.

On the same day, third party candidates Dr. Jill Stein (Green Party) and Rocky Anderson (Justice Party) held a expanded Presidential debate broadcast by Democracy Now. Jill Stein and Libertarian Party candidate Gary Johnson each wrote responses to the debate published by USA Today.

The topics of the first Presidential Debate, selected by moderator Jim Lehrer, were the economy, health care, the role of government and governing. Tax issues featured prominently among all the candidates. The Wall Street Journal has summarized the tax issues debated by Obama and Romney. Third-party candidates also advanced some intriguing tax ideas, which I shall highlight below.

Justice Party candidate Rocky Anderson, during the expanded Presidential debate, made an interesting tax proposal. He called for eliminating the Social Security wage base that sets a maximum limit to the amount of Social Security taxes:

"As to Social Security, the Social Security payroll tax is as regressive a tax known to mankind, because if you make one $110,000, you don't pay anything on the income over that amount. Everybody pays the same thing up to that point. We need to lift the cap.

"You could reduce the percentage that workers pay. You could bring it down to 4% so that the middle class and the working poor come out ahead. You lift the cap, and then you also have those who make their money through investments pay their fair share as well. There's no reason why working people are paying toward social security and those who are living off their investments get away, once again, without paying their fair share."

Libertarian candidate and former Governor of New Mexico Gary Johnson also advanced an interesting proposal for balancing the budget without requiring tax increases in response published by USA Today:

"Americans deserve the truth. The truth is that our deficits are not only unsustainable, but represent a very real threat to this nation. And of the $16 trillion in debt our government in Washington has racked up, it is almost equally split between Republican and Democrat administrations.

"It doesn't have to be that way. I will submit a balanced budget in 2013. Yes, that budget will call for spending reductions of 43% -- the reductions necessary to match revenues without raising taxes."

Both Jill Stein and Rocky Anderson called for allocating America's tax dollars to fund a jobs program. Stein proposes "a Green New Deal modeled after the New Deal that actually got us out of the Great Depression. They created approximately 4 million jobs in as little as two months. So, there is a lot that we can do if we put our mind to it. We're calling for jobs created at the level of our communities that are nationally funded and which put decisions in the hands of the community about which kinds of jobs they need both in the green economy and meeting their social needs, that would be focused and controlled locally, but funded at the national level."

Rocky Anderson, similarly, looked back to the New Deal and proposes a new Work Progress Administration: "So, there are things that have been proven in our history to work. We could have put in place, and it needs to be put in immediately, a WPA Works Progress Administration kind of program where we are investing in the future by building up our nation's rapidly deteriorating infrastructure, putting people to work. In the WPA project they 8.5 million people to work. We could be putting 20 million to 25 million people to work and making that kind of investment in our nation's future."

For more information, here's a collection of Candidates' Web Pages on Tax Issues:

FactCheck.org researched the claims made by Obama and Romney during the debate, including many of their statements related to tax policy over at "Dubious Denver Debate Declarations."

The Presidential debate was sponsored by The Commission on the Presidential Debates, which has come under scrutiny over its policies:

Finally, some thoughtful reactions from the tax world:

Comments
October 10, 2012 at 12:28 am
(1) Rick says:

While I genuinely appreciate your guidance on Generally Accepted Procedures and tax rules and regulations…IMO you are deviating from the purpose of this “guide” and your audience by using it to air political postions on taxes that have NOT yet become rules. Such practices detract from the effectiveness and credibility of this instrument. I respectfully request you stick with the tax facts, at which you are exert…and please stay out of the political spin arena.

October 10, 2012 at 12:15 pm
(2) Kimberly says:

AARP did a study that showed if you lifted the cap on Social Security taxes, it would remove 85% of the Social Security deficit. The argument for having the cap is that those earning above $110,000 will never use all the Social Security benefits they are paying for. However, Social Security is not a pay-as-you-go system. It’s a tax that makes sure we don’t have elderly people eating cat food or begging in the streets. I would think everyone would want to live in a society that cares for its elderly. That’s the social purpose the program.

From an economic perspective, it’s a way of putting a floor under recessions and preventing them from becoming depressions. That’s why it was instituted by President Roosevelt and Congress after the Great Depression — so we would never need bread lines again.

Kimberly

October 15, 2012 at 10:54 am
(3) Steven B says:

Thank you for posting this information and the links. It is very interesting to read what other tax ideas are being discussed.

October 29, 2012 at 2:21 pm
(4) Cyborg1939 says:

I declare that I disagree with the comment by Rick. I find the more ( non- biased ) factoids we can learn about both real and proposed taxation the better. Your reportage is simply EXCELLENT and greatly appreciated. Kudos.

Cyborg

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